I have long believed that when instituted correctly and fairly, trade agreements open up new markets to U.S. goods, create opportunities for American companies and their employees, and lift the standard of living for people in the country with whom we are trading. If the United States is going to compete in the 21st century global economy, we cannot shy away from opportunities to guide and expand global trade.
At the start of the last session of Congress, I was proud to join with members of both parties to announce a new trade policy for America. This agreement was the culmination of several years of hard work done by Democrats. It guarantees that enforceable labor, environment, and protections for American-made products are included in trade agreements. The inclusion of these principals within all trade agreements will make certain that Americans can compete globally on a level playing field.
I have also worked to make sure our trade efforts are sound and do not promote bad policy. We also need to write laws the comply with international obligations. For example, in a trade dispute brought by Brazil to the World Trade Organization, it was determined that the U.S. cotton subsidy program violated international trade rules. Instead of working to adjust this program immediately, the U.S. agreed to pay Brazil $147.3 million a year for technical assistance to the cotton program. This payout is only further distorting the market and obstructing future trade growth. We must resolve the U.S.-Brazil trade dispute by updating and reforming U.S. agricultural subsidies, particularly cotton, instead of making annual payments to Brazil. We cannot continue to take the easy way out by maintaining this payout and we absolutely cannot expect our trading partners to play be the rules if we are not willing to do the same. Instead, we must work to promote fiscally responsible policies that do not distort the marketplace.
Free Trade Agreements
The United States currently has 18 free trade agreements (FTA) in force. These agreements are creating new opportunities for U.S. businesses and workers as they lowers tariffs and remove many non-tariff barriers. The following are the most recently implemented FTAs.
The impact of the elimination of tariffs and related barriers is estimated to increase U.S. GDP by nearly $12 billion and U.S. goods exports by nearly $11 billion annually. For Wisconsin, this agreement is particularly beneficial for the machinery manufacturers, computer and electronic products and agriculture. In particular, Wisconsin’s dairy industry is the nation’s largest exporter and is the state’s largest agricultural industry. Here in western Wisconsin we have 5.6 million acres of farm land that produced $2.7 billion worth of products in 2007. Many of our agricultural products will benefit from this agreement by establishing duty-free tariff rate quotas for cheese, skim/whole milk powder, food whey, and butter as well as immediately eliminating feed whey tariffs. For more specific information on how the U.S.-Korea FTA impacts Wisconsin, please click here. To learn other key facts about the agreement, click here.
Panama is one of the Latin American countries with which the U.S. has a current trade surplus, yet fewer than 40% of U.S. exports entered Panama duty-free. This comprehensive trade agreement will eliminate tariffs and other barriers to U.S. exports, immdiately resulting in 87% of U.S. goods entering Panama duty-free and remaining tariffs being eliminated within 10 years. More recently, Panama signed a bilateral tax information exchange agreement. For more specific information on how the U.S.-Panama FTA impacts Wisconsin, please click here. To learn other key facts about the agreement, click here.
Over 90% of Colombian products entered the U.S. market duty-free in 2010, while U.S. merchandise entering Colombia faced tariffs averaging 9%. This FTA is designed to level the playing field and will eliminate tariffs for over 87% of U.S. exports of consumer and industrial products within five years. The Colombia FTA is expected to expand American exports by more than $1.1 billion and increase U.S. GDP by $2.5 billion. In 2007, Wisconsin’s merchandise exports to Colombia totaled $84.7 million, an increase of 162% between 2003 to 2007. Additionally, Colombia is a large market for U.S. farm products with significant potential for growth. Despite high tariffs and other barriers on most agricultural products, including key Wisconsin farm products such as vegetables, feed grains, and dairy, U.S. exporters shipped more than $1.2 billion in U.S. farm products to Colombia in 2007, up 41% from 2006. To address the on-going labor concerns in Colombia, the Obama Administration and Colombian governments agreed to an important action plan related to labor rights, which must be completed before the FTA would go into effect. For more specific information on the U.S.-Colombia FTA impacts Wisconsin, please click here. To learn other key facts about the agreement, click here.